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Behavioral Advertising Bill Breaks New Ground

If you feel that Internet ads have become a little too personal lately, you may be right — and you’re not alone. Chalk it up to the online phenomenon known as behavioral advertising. Keep reading to find out what it is, how and why it happens, and what privacy advocacy groups and members of Congress hope to do about it.

Behavioral advertising and behavioral targeting are essentially the same thing. It’s online advertising specifically geared towards you: what sites you visit, what items you purchase online, what links you click, what stories you read. Quite literally, this is advertising that follows you around the web. For example, if you were just checking out Expedia for the cheapest flights to San Francisco, the next page you visit may have an ad for San Francisco’s new “it” restaurant and bar. The advertisements are contextual.

The theory behind behavioral advertising goes something like this: the average Internet user is bombarded by advertisements each time they’re online — whether it’s checking their e-mail or reading the online edition of their favorite newspaper. They are so used to being inundated by ads that they’ve learned to block them out.

Most of us have become very good at ignoring annoying Internet ads and pretending they don’t exist, but behavioral advertising attempts to remedy this by grabbing our attention with ads that seem to fall in line with our online interests. These advertisements are based on our favorite websites, the search queries we conduct, the personal details we list on our FaceBook and MySpace pages, etc., etc. It’s becoming frighteningly clear that we inadvertently reveal a lot about ourselves while doing our daily online tasks, and companies consider this valuable insight as to what ads we might be interested in seeing and what products we might be interested in purchasing.

Privacy watchdogs, on the other hand, have a different take on this type of advertising. They believe it’s an invasion of our privacy and that most people — if given the option — would not want their online activity tracked. As a matter of fact, this topic is something that Rep. Rick Boucher (D-Va.), chairman of the House Energy and Commerce Subcommittee on Communications, Technology, and the Internet, feels very strongly about and is hoping to change. Boucher believes that the average American has no idea that Internet marketers are tracking their online habits and mining that data to be used for targeted pitches, which is why he’s in the process of creating a privacy bill unlike any other put forth by Congress.

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Boucher is working with Cliff Stearns of Florida, the top Republican on the Internet subcommittee, and Rep. Bobby Rush (D-Ill.), who chairs a separate subcommittee on consumer protection, to draft the bill. He says it will educate consumers as to what information is being collected about them, how it is being utilized, and how they can have more control over how that information is used.

Advertising has experienced a great amount of regulation in the past, especially as it pertained to alcohol and cigarettes. That being said, there has been little to no need for Congress to impose any privacy protections on current offline advertisements because more traditional media — such as TV, radio, and newspapers — don’t allow marketers to profile their individual consumers as easily, or as commonly, as the Internet does. It seems to be about time for privacy laws be updated to reflect new business practices, which are obviously largely dependent on commerce generated online.

If passed, Boucher’s bill would not be the first significant online privacy law. In 1986, Congress approved the Electronic Communications Privacy Act, which protected those who worked at companies or organizations that offered e-mail services. There was also the Children’s Online Privacy Protection Act of 1998, which required websites geared towards children under the age of 13 to obtain parental consent before collecting personal information.

Boucher’s proposed bill, however, would mark the first major attempt Congress has made to regulate Internet advertising. As recently as this summer, Washington’s interest in Internet marketing put online advertisers on edge. In July, the industry was forced to release self-regulatory principles in hopes of easing the concerns of Congress and the Federal Trade Commission. The FTC also put out Internet ad guidelines earlier this year.

Boucher’s bill will break new ground if it succeeds at regulating this new, yet quickly growing industry believed to represent the future of Internet advertising. So, how do you put a stop to what advertisers are trying to make commonplace? According to insiders, the bill will impose broad new rules on websites and advertisers, but many are wondering whether or not it will affect how the Internet works and what information can still be accessed by users for free.

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Boucher contends that his bill will benefit consumers, but not to the detriment of being able to access information freely. “The bill will preserve the underlying economics of the internet, which relies on advertising to keep so much online content free,” Boucher said. “Our goal is not to hinder online advertising; it will simply make people more likely to trust electronic commerce and the internet.”

It goes without saying that attempting to govern Internet advertising will not be an easy task, which is why Boucher will have to make his mandates as clear and concise as possible. Some of what the bill will require of Internet advertisers has already been released online. Here are some particularly important standouts from Boucher’s proposed bill, which he is still in the process of drafting:

Websites who collect — or hire outside companies to collect — visitor information to be utilized for targeting ads on their pages will be required to prominently disclose what information they gather on the home page of their site.

Furthermore, those sites will also have to detail to visitors how their information will be used, how long it is kept on file, and whether or not it will be shared with other parties.

The sites will also be required to give visitors an “opt out” option, which means they will not allow their data to be collected, but will still be able to view the site.

Websites that share the data they’ve collected with other parties with the intent of creating targeted ads will be required to obtain user approval before collecting their data. In other words, consumers will have to agree or “opt in.”

According to the bill, these same sites can qualify for an opt-out requirement, but only if they meet certain conditions. For example, the site could choose to let its visitors review, modify, or delete the profiles that have been created based on their information.

Another option for sites is ensuring that their advertisements contain links that reveal to visitors what information is being collected, and provide them with the opportunity to opt out of targeted pitches.

Any sites that reveal sensitive personal information, such as Social Security numbers, medical and financial data, ID numbers, sexual orientation or sites that share consumer information with unaffiliated third parties for commercial purposes would also be subject to the opt-in rule.

{mospagebreak title=Online Privacy Becomes a Serious Political Issue}

Privacy activists, such as the Electronic Privacy Information Center, are welcoming Boucher’s bill with open arms and consider it a long time coming. Many of these groups feel that Internet advertising crossed the line in terms of privacy long ago and that practices have only gotten worse. Many are quick to point out that Internet surveillance has moved well beyond simple data tracking through the use of cookies that websites place on Internet user’s computers.

Now, many sites aren’t against using new technologies such as deep packet inspection (DPI), which can literally enable someone to monitor every move a user makes online. Aside from data mining, DPI also enables advanced security functions, eavesdropping, and censorship. Technologies such as these can be incredibly harmful if used inappropriately and leave advocates of net neutrality fearing that DPI technology will eventually reduce the openness and anonymity of the Internet. It has been reported that DPI is currently being actively used by companies, service providers, and governments in a wide range of applications.

The Center for Digital Democracy is one of ten privacy groups that recently issued recommendations to Congress. The organization’s Executive Director, Jeffrey Chester, is one of many who think the public needs to be made aware of just how easy it is to collect their information and the extent to which it’s being collected. "Consumers have no idea that they are being followed online and that their information is being compiled into invisible digital dossiers," Chester said. "There is an incredibly sophisticated, ever-advancing system for profiling online users."

The increasing popularity of social networking sites, which are utilized by millions of users worldwide, has definitely put online advertising and privacy issues on Washington’s radar. Facebook and MySpace are obvious contenders, as they are notorious for capturing detailed personal information, but they’re not the only focus of Congress. It has been reported that Google’s recent acquisition of the Internet advertising service DoubleClick and the proposed partnership between Microsoft and Yahoo are now both under investigation by the Justice Department.

Without a doubt, the greatest challenge facing Washington in terms of Internet privacy is striking the right balance between protecting the fundamental right to privacy on behalf of consumers and preserving online business. "Online privacy has finally taken off and become a serious political issue,” Chester said. “A perfect digital storm has created momentum toward action.”